Monday, May 18, 2015

Some Charter Budgets Take an Unexpected (but Well-Deserved) Hit

Posted By on Mon, May 18, 2015 at 2:30 PM

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This is a story about charter school funding that flew below my radar until now. The new state budget cut a money stream for some charters, saying it would be a $6.5 million cutback during the first year of the phase-in. Now the Department of Ed is saying it'll be closer to $15 million, which will grow to $24 million in 2017 and $32 million in 2018. The privately funded Arizona Charter School Association wasn't very happy before, but now it's really, really unhappy.

What's happening is, a loophole some charters were exploiting for extra cash is being closed. The lege was right to close it, but given Republican majority's pro-charter orientation, I'm surprised it happened. Basically, charter groups with lots of schools have been getting extra money which is only supposed to go to individual schools and districts with fewer than 600 students, and the new legislation stops that from happening.

The small schools allocations makes sense. If a district has fewer than 600 students, its per-student costs are higher than bigger districts which have the advantage of economies of scale, so the state gives those small schools some extra money—even more if a district is in an isolated area. Multiple-school charter organizations have gamed the system by pretending the schools are separate entities and scrupulously keeping each school's enrollment below 600.  Senate Bill 1476 closes that loophole. If the charters are run by a single management company, if they have identical board members, if they are subsidiaries of a corporation with other subsidiaries in the state—if any of those hold true, the schools' enrollments are added together. If the total is larger than 600, they get no extra small schools money.

The change will affect BASIS, Great Hearts and Imagine charters as well as a number of other schools which are connected to other schools.

(I haven't been able to pin down how much the small school allocation amounts to per student. I know it differs by total enrollment and grade level, and I know it's got to be a sizable chunk of change if, once it's completely phased in, the total is $32 million just for those charters that are part of a larger group, but I don't know the actual amounts. I'm looking into it.)

I already mentioned I was surprised that the AZ lege would allow a cut to charter funding like this one to pass. I guess if the target is education funding, they'll even take money from their buddies, and I guess Ducey was OK with it as well. But with the new, higher number, some of them are having second thoughts.

I'm speculating here, but I wonder if the higher number had something to do with the feud between Diane Douglas and Ducey over Common Core and control of the Board of Education. It was Douglas' Department of Ed that announced the new, higher figures. My bet is, if Huppenthal were still in control, he would have figured out how to fudge the numbers down to what had been promised to the legislators. After all, he played fast and loose before when he spent more state money on the vouchers-on-steroids, aka Empowerment Scholarship Accounts, program than he was supposed to. But there's no love lost between the Governor and the Ed Supe, not to mention her running battles with the Board of Ed, which she said s conspiring with Ducey to move students from district schools to charters. So I'm thinking, when she and her staff crunched the numbers and found the cuts were more than double what the legislators had been promised, she decided to go with the higher figure. Maybe she plans to hold firm on that number, or maybe she wants to see what kind of concessions she can wring from Ducey and the Board that might help her change her mind. Can you say Bargaining Chip, boys and girls? (Does it show how much I'm enjoying this education-leadership cage match? Maybe they'll be so busy going after each other, they won't have time to do as much damage as they want to.)

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